Letters to the Hill

Subchapter S Tax Reforms

September 15, 2004

September 15, 2004

The Honorable William M. Thomas
United States House of Representatives
2208 Rayburn House Office Building
Washington, DC 20510

Dear Chairman Thomas;

On behalf of the 5,000 members of the Independent Community Bankers of America, I urge you to help ensure the House-passed Subchapter S tax reforms remain in any final conference on H.R 4520. The ICBA sincerely appreciates the bipartisan Ways and Means Committee support for these beneficial Subchapter S reforms. The Subchapter S items already included in the House-passed version of H.R. 4520 will help simplify the tax treatment for thousands of small- and family-owned businesses operating nationwide. While the Senate has supported these same Subchapter S reforms in other legislation, the Senate-passed version of H.R. 4520 currently does not include them. Therefore, as H.R. 4520 goes to conference, we ask for your continued support for these House-passes Subchapter S reform when it is most needed.

Specifically the House-passed Subchapter S items in H.R. 4520 would greatly benefit millions of existing S corporations and allow more small businesses to qualify for this simplified tax-filing status by increasing the number of Subchapter S corporation eligible shareholders to 100 from 75; counting all family members as only one shareholder; permitting S corporation shares to be held in IRAs; and easing restrictive passive income rules.

These Subchapter S reforms would greatly simplify the tax treatment for thousands of small businesses and community banks. Today there are more than three million Subchapter S businesses in America. The Subchapter S changes already in H.R. 4520 will help preserve the viability of community-based banks, small businesses, and most importantly, will help bolster the local economies of the communities they support. I ask for your continued support for America's domestic small businesses by preserve the House-passed S corporation reforms in conference.